The Gazette 1989

SEPTEMBER

1989

GAZETTE

2. An EEIG must have a minimum of two members from separate Member States, who must be carrying on a business within the Community. 3. The members of an EEIG have unlimited joint and several liability. 4. Unlike a company, an EEIG may have no more than 500 employees. 5. An EEIG cannot hold a con- trolling interest in a member or in another undertaking, or exercise powers of control over another undertaking. 6. An EEIG cannot be a member of another EEIG. 7. An EEIG may not invite invest- ments from the public. 8. There is no obligation on an EEIG to hold annual general meetings or make annual returns. 9. An EEIG requires no Memor- andum and Articles of Association, merely a contract for the f o rma t i on of the grouping, registration of which signals the formal creation of the EEIG as an autonomous legal body. 10. The members of an EEIG, who have to have been engaged in an economic activity prior to its creation, must fall within three categories i.e. a) natural persons engaged in business including the provision of professional services; b) companies or firms within the meaning of Article 58 of the Treaty of Rome; c) charitable bodies carrying on a business. 11. As mentioned above, an EEIG may not be formed for the purpose of making a profit for itself. However, there is no pro-

hibition on making a profit as a consequence of its lawful activities. E) Commercial base and taxation of the EEIG 1. There is considerable flexibility in the financing of an EEIG. It need not be set up with capital. Instead, the financing can be by way of cash in the form of a cash advance, regular sub- scriptions, in kind, or by way of services. 2. There is nothing to prevent an EEIG from borrowing from a bank or issuing medium-term notes, but it is prohibited from raising capital by issuing bonds or other securities for sale to the public. 3. If expenditure exceeds income, the proportion which each member will contribute will be determined by the contract for the formation of an EEIG. In the absence of such agreement, the Regulation provides that mem- bers shall contribute in equal shares. 4. The profits of an EEIG are deemed the profits of the members and are apportioned among them in the proportions laid down in the contract or, failing that, in equal shares. The Regulation has adopted the principle of tax transparency i.e. all profits (or losses) are even- tually returned to the members. 5. It follows from the above that profits or losses are taxable in the hands of the members only. In all other respects, national tax laws will apply, particularly as regards what profits shall be subject to Irish taxation and the basis on which they will be apportioned to the members.

6. National law will govern matters concerning insolvency. The only specific restriction the Regula- tion places on the application of national law is that commence- ment of proceedings against an EEIG shall not by itself cause commencement of proceedings against the members. The reasoning is that there should be a common pool of assets for the benefit of all creditors. Territorial insolvency laws could stand in the way of this. F) Formalities in setting up an EEIG 1. The formalities involved in setting up an EEIG are quite straight-forward and are based on two requirements: a) The conclusion of a written contract. b) Registration in the Member State in which the EEIG has its official address. 2. The minimum contents of the contract which must be filed at the Registry are: a) Name of the EEIG, preceded or followed by the word "EEIG". b) Official address. c) Objects. d) Name, business name, address etc. of each member. e) Duration of EEIG unless indefinite. 3. Notice of the formation of the EEIG must be published in the Official Journal of the European Communities. 4. As a safeguard to third parties, other documents and particu- lars must also be filed as and when certain events take place such as amendments to the contract, appointment of man- ager, transfer of official address, insolvency, etc.

The Case Law of the European Court of Human Rights VOLUME 1:1960-1987 VINCENT BERGER This book covers the Court case law from its first decision — in 1960 — up to 31 December 1987; it will be followed by volumes documenting the steadily in- creasing number of cases being dealt with.

decision and a note of the changes effected in national law and procedure resulting from the decisions. ISBN 0-947686-37-1 hardback £45.00 THE ROUND HALL PRESS Kill Lane, Blackrock, Co. Dublin Telephone: (01) 892922 Fax 893072

Almost four hundred million people, in twenty-three States, are affected in their lives and liberties by the decisions of the European Court of Human Rights, making it the most influential Court in the world.

For each of the 117 cases covered Dr Berger provides a full summary of the facts and of the law involved, together with a summary bibliography for each

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